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Review of Social EconomyPublication details, including instructions for authorsand subscription information:http://www.tandfonline.com/loi/rrse20

Approaches to the SocialEconomics of Well-Being: A BookReview EssayHalcyon Louis aa The Universalia Management Group Limited(Universalia) , Montreal, Quebec , CanadaPublished online: 25 Jan 2013.

To cite this article: Halcyon Louis (2013) Approaches to the Social Economics ofWell-Being: A Book Review Essay, Review of Social Economy, 71:3, 399-405, DOI:10.1080/00346764.2012.761762

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Book Reviews

Approaches to the Social Economics of Well-Being: A Book Review Essay

Preference, Value, Choice and Welfare. Edited by Daniel M. Hausman, NewYork: Cambridge University Press, 2012, 168 pp., ISBN 978-1-107-69512-2,$26.99 (paperback). Human Resource Economics and Public Policy: Essays inHonor of Vernon M. Briggs Jr. Edited by Charles J. Whalen, Kalamazoo, MI:W. E. Upjohn Institute for Employment Research, 2010, 283 pp., ISBN 978-0-88099-359-3, $20 (paperback). Looking Beyond the Individualism and HomoEconomicus of Neoclassical Economics: A Collection of Original EssaysDedicated to the Memory of Peter L. Danner. Edited by Edward J. O’Boyle,Milwaukee, WI: Marquette University Press, 2010, 180 pp., ISBN 978-0-87462-066-5, $20 (hardcover).

The evolution of social economics continues to be harnessed to the challengesposed by the maxims of mainstream economic thought. It is perhaps not so muchthat social economists demonstrate a unique and radical way of thinking, butrather that they have chosen to address the issue of social well-being, which hasbeen overlooked during methodological discourse on the laws of supply anddemand and the animation of rational economic man. For social economists, theintersection of social behavior and economics can be used to “get the balanceright” or, more specifically, to effectively tackle the emaciating social ills ofpoverty, inequality, and human suffering. The current review examines threedivergent publications within the subdiscipline of social economics.

The first of these books, Preference, Value, Choice and Welfare, was writtenfor an audience comprising social scientists, philosophers, and interestednonacademic readers. The author, Daniel M. Hausman, is an Americanphilosopher, who holds the Simon and Hilldale Professorship in Philosophy atthe University of Wisconsin–Madison. His record of academic research andpublication concentrates on the boundaries of economics and philosophy, with afocus on issues pertaining to epistemology, metaphysics, and ethics. CharlesJ. Whalen, Jr assumed the role of editor of the second publication, HumanResource Economics and Public Policy. This seminal publication is anamalgamation of essays by former students and colleagues of VernonM. Briggs Jr, emeritus professor of industrial and labor relations at CornellUniversity. Overall, the essay contributions apply the discipline of economics tothe subject areas of human resources and public policy within the context of theUnited States. The editor is a professor, and director of business and economics at

Review of Social Economy, 2013

Vol. 71, No. 3, 399–408

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Utica College, a private university in Utica, in the State of New York. The thirdpublication reviewed, Looking Beyond the Individualism and Homo Economicusof Neoclassical Economics, is a volume of original essays developed in memoriamof the scholarship of Peter L. Danner, a former professor emeritus of economics atMarquette University. Editorial work for the publication was conducted byEdward J. O’Boyle, a senior research associate at the Mayo Research Institute, anAmerican nonprofit organization that specializes in economic research. Essaycontributions were developed by notable faculty in the field of economics inseveral countries, who are also former colleagues and associates of PeterL. Danner. They provide a commentary on his work in philosophy and economics,as well as an expansion of his precepts as applicable.

While each volume focuses on a specific area of economics, each contributes toan overview of the social economics way of thinking, with particular emphasis onthe achievement of improved societal well-being for all persons. Arguably, eachpublication can be used to create a structured argument in support of the need formultidimensional economic theorizing. This approach would seek to understandindividual behavior relative to economic decision making, and assess the extent towhich government intervention is required for the establishment of a fair andequitable allocation of social resources, remuneration, and economic opportu-nities. This review provides an overview of the arguments proffered by eachpublication, followed by a general synopsis of possible implications for socialeconomic thought.

Using a combination of philosophy and economics, Hausman explores thenotion of preferences, with an emphasis on the interpretation of the term and its usein outcome appraisal, as well as its contribution to a greater understanding ofindividual actions. This is in distinct contrast to an empirical study of identifiedpreferences, where the focus would be on factors that motivate individualpreferences, and the effect of preferences on individual behavior. The generaldiscourse of the book is skewed toward the articulation of preferences byeconomists. The author carefully distinguishes between the notion of preferenceswithin economics, and its use in explaining the choices made by agents, as well aspossible resultant benefits from the choices made. Hausman contends, however, thatthe book is an essay in the philosophy of the social sciences, which highlights theimportance of preferences in the disciplines of economics, psychology andphilosophy, as well as in day-to-day human activities. Importantly, the author infersthat preferences are comparative, resulting from the weighing of alternatives, andare therefore markedly different from desires, which accord an equal value toavailable options. This literary work can be useful to social scientists and others whoharbor an interest in the contribution of preferences to individual social well-being.

Hausman locates preferences at the core of mainstream economic theorizingand submits that while preferences are context-dependent, they also affectdecision-making processes (choice) and individual well-being. He identifies fourgeneral conceptions of preference: enjoyment comparisons, comparativeevaluations, favoring, and choice ranking. Hausman focuses quite early, however,on the notion of preference as a total comparative evaluation of alternatives

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comprising actions, consequences of actions, and states of affairs. This conceptionof preference draws heavily on positive economics, which purports to describeand explain economic behavior, without casting economic value judgments forobserved cause-and-effect behavioral relationships. Hausman notes the interplayof diverse factors that influence preferences, and therefore reasons that economictheorizing can benefit from a narrower scope of modeling choice behavior througha standard model. He argues that economists have inadvertently misconstrued thenature of preferences and its role in determining individual welfare. Specifically,the author identifies five misconceptions about preferences within mainstreameconomics, which imply that agent preferences are: arbitrary, determinants ofwelfare through satisfaction, governed by self-interest, anchored in revealedpreference theory and therefore definable in terms of choices, and not formed and/or modified by economists. Hausman counter argues that these misconceptions arenot defensible, and suggests that their correction would contribute to animprovement in economic thought.

The conception of preferences, as a subjective total comparative evaluation ofalternatives, can be used to develop a standard model of choice behavior based onthe perceived interplay of preferences, constraints, and individual beliefs. Hausmannotes that the standard model of choice is not the only qualifier for choices made byagents, as it does not explicitly incorporate the influence of additional factors onchoice behavior. He emphasizes, however, that all influences on individual choicecan be classified under the key elements of the standard model (preferences,constraints, and beliefs), thereby contributing to choice behavior through totalcomparative evaluations. Hausman further submits that the combination of thestandardmodel of choice and the working definition of preferences, as total standardevaluations, increases the possibility of dispelling the existing misconceptions ofpreferences in mainstream economic thought. He emphasizes that this is achievablethrough the recognition that preferences result from a deliberative process byeconomic agents, the comprehension of which requires the construction of modelsof preference formation and modification within the discipline of economics.

With its focus on human resources and public policy, Whalen’s edited volumeof essays adds another dimension to the debate on social well-being. While thispublication was produced in honor of the academic scholarship of ProfessorVernon M. Briggs Jr, it holds added critical value on two levels. First, the editedvolume of essays serves to disprove one of the main criticisms of the economicsdiscipline, specifically, that its foci of analysis are abstract constructs that are farremoved from real-world situations. The counterfactual of this perception takesthe format of four thematic areas of discussion in Whalen’s publication, whichunder each essay can be further subclassified, namely: real-world economics,immigration policy, labor markets, and public policy. The essay contributions,although distinct in their respective narrative discourse, are indicative of aninterest by proponents of contemporary economic thought, in real issues andefficient problem-solving. Second, the essays indirectly address the perception ofdisconnect between macroeconomics and microeconomics. Within basiceconomics, macroeconomics and microeconomics are presented as two distinct

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subdisciplines, with the implication of coexistent, rather than collaborative,specialities. Human Resource Economics and Public Policy, with its focus onpolicy-oriented human resource economics, lends credence to the belief thatindividual well-being is largely attainable through the combined efforts of keydecision makers and other relevant stakeholders across disciplines and specialities.

Although the editor has not identified a target audience, the publication isbeneficial to persons in academia as a synopsis of the professional contributions ofProfessor Briggs, as well as to policymakers within the American federal servicewho hold responsibility for identifying workable solutions to emergent issues inthe American labor market. In addition, although essay contributions are specificto an American labor-market context, the scenarios explored, inclusive of findingsand recommendations, can be useful to policymakers, economists and other socialscientists, and other relevant stakeholders facing similar human resource andpublic policy issues, irrespective of their geographic locale.

Although the essay contributions differ in their specific areas of focus, theyshare a common element, namely, a pragmatic approach to analysis that iscombined with a call for human resource development. Within the context of theteachings of Vernon J. Briggs, human resource development refers to themanifestation of human resource economics in public policy. Briggs identifies fivedimensions in human resource development: workforce quality, quantity, andopportunity, personal development, and international well-being. He posits thatgovernment regulation of labor markets through policy intervention is essential forthe achievement of human resource development. Briggs further asserts that labormarkets do not always operate at optimum levels of efficiency, therefore providinga preconditionality for intervention. He maintains that efficiency in the Americanlabor market should be subsidiary to societal well-being, which can be achievedthrough governmental investment in the five dimensions of human resourcedevelopment. The ultimate objective for public policy, from the perspective ofhuman resource economics, is the implementation of policies that promotefairness, equal employment opportunity, and self-sufficiency at the familial levelamong the working class. This viewpoint is explored by essay contributions thatuse a human resource economics approach to contend that human resourcedevelopment is a requisite for economic progress and social development.

In addition to tracing the professional development and intellectualcontribution of Vernon J. Briggs, essay contributions explore key issues inlabor force dynamics. The main issues discussed pertain to immigration,discrimination, and workforce development, within the context of Briggs’scholarship. The discussions on immigration are focused on labor-marketeffects and immigration policy. Further discussions on the labor market addressexisting discrimination, workforce behavior, and human capital investment.Considerable emphasis is placed on human resource development within thispublication. This draws on the definition of economics that has been promulgatedby Briggs, who has perceived of the discipline of economics as an operationalfield that serves a twofold purpose. On the one hand, Briggs rationalizes thateconomics has been developed to address real-world issues. On the other hand, he

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argues that economics can be used to inform policy design and implementation inthe interest of securing national well-being through human resource development.Interestingly, there is also an overview of the mentorship provided to Briggs byacademic authorities on labor and industrial relations, and institutional economics,as well as the influence of his students in drawing his attention to real-world labor-market issues.

The third book, Looking Beyond the Individualism and Homo Economicus ofNeoclassical Economics, focuses on Peter L. Danner’s work as an economist,which is best personified by his contribution to the evolution of personalisteconomics. This stream of economic theorizing advocates for a replacement of theindividualism of neoclassical economics with the philosophy of personalism.Within personalism, and by extension personalist economics, there is greateremphasis on a humanistic approach to economic thought, through the use of theperson as the basic unit of economic analysis. This is in contrast to the focus on theindividual economic agent, also known as homo economicus, in mainstreamneoclassical economics and the self-regulatory mechanism of the market. Danner,through the perspective of personalist economics, replaces the abstract economicagent of mainstream economics, with the economic person who displays physical/material needs, as well as nonmaterial or spiritual requirements. According toDanner, decision making by the economic person, relative to preferences andmaximum satiation, is not conducted in a vacuum but by persons who are bonafide members of their communities, society, and nation. Danner further confersthat personal economic behavior, as well as the workings of the economy, canonly be understood within the context of the wider social environment.

Importantly, all essay contributions in this publication are written from theperspective of personalist economics, including an examination of the paradox ofaffluence, as explored by Danner, which identifies inordinate consumption bywell-off segments of society at the expense of widespread social deprivation.According to the argument, this pattern of consumption is fueled by economicliberty, and leads to an undervaluing of the need for equality and dignity for allpersons. Essay contributions in favor of Danner’s maxim of personalism havenoted, however, that there is a need for a structured value hierarchy, to guide thesocial and economic fabric toward actions that are moral and beneficial to allmembers of society. This is in accordance with the central ethos of personalism,which involves incorporating Christian standards into orthodox economicanalysis. It is noted here that personalist economics forms the basis of CatholicSocial Thought. Given the focus on Christian standards of living, it is hardlysurprising that personalist economics identifies an equivalent need for a focus onthe economic person in economic policy making and implementation. This is seenas being intrinsic to the process of wealth reallocation and the regulation of fairworking conditions. Interestingly though, notwithstanding their endorsement ofpersonalism, only 1 of the 10 essays in this published work explores the use ofpersonalist economics in public policy. Specifically, the referenced essayexamines the possibility of governmental intervention for the application ofregulatory standards to the activities of multinational enterprises. It takes a

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practical real-world approach to the exploration of personalist economics, incontradistinction to the focus on theoretical concepts demonstrated by the otheressays in this volume. The review anticipated a greater focus on public policy inthis publication, as one of the definitive traits of personalist economics isinstitutional intervention in the event of market failure. This is in direct contrast toa reliance on market regulation through the price mechanism in neoclassicaleconomics.

Edward J. O’Boyle, the editor of this collection of essays, has not identified aspecific target group for the publication, which was compiled to honor andcelebrate the life of Peter L. Danner. In light of its central thematic, however, thispublication is a resource for social scientists, students and researchers, and keydecision makers in government, given its focus on the basic tenets of personalisteconomics. While the compilation of essays does not exhaust the subject area, itdirects readers toward additional sources of information. In addition, it wieldsuniversal value through its theoretical focus and essay contributions that havebeen developed in various country contexts.

In general, social scientists are required to take a big picture approach toanalysis, where cause and effects are examined within a context of wider societalfactors, in addition to the influence of personal preferences, value systems,resources, etc. This has been demonstrated by all three publications, wherecontributing authors have assayed the influence of factors that are external to thefocal areas of analysis for each published work. Differences in the main subjectarea of each discourse notwithstanding, the three publications that have beenreviewed are unified by a focus on the achievement of the greater societal good,specifically, the sustainable social well-being of all persons, and by extension, ofall segments of society. The discussions have ranged from individual traits,through the redistribution of wealth, to public policy interventions. The centralelement that can be extracted from author contributions is the implication of thisinterest, in balancing the socioeconomic purse, on the continued evolution of thesocial economics subdiscipline. Indeed, social economics has gained recognitionover the years as a robust discipline in its own right. However, the debatecontinues on whether emergent issues pertaining to the resolution of socialgrievances, for example poverty, social inequality, and unemployment, are bestaddressed through a mainstream economics perspective or a more applied form ofeconomic theorizing, such as personalist economics or a hybrid of industrialrelations and economics.

The attainment of increased social equity through established systems and/ormechanisms that exude efficiency and effectiveness is perhaps a central aim ofmodern society. This is not to say, however, that modern society is making aconcerted resolve to minimize the gaps between the haves and the lesser fortunatesocial segments. Each of the publications reviewed serves as a reminder to policymakers, and all parties interested in sustainable socioeconomic order, of the needfor a collaborative multidimensional approach to the establishment of socialequity. The review has unearthed discourse on the effects of individualpreferences, values, and choice making on social well-being, as well as a call for

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supportive public policy to address societal grievances, and a need for increasedfocus on the economic person during efforts toward greater socioeconomicbalance. Undeniably, each literary contribution addresses a significant componentof the social equity debate. It is left to be seen, however, whether theseconsiderations will take the forefront in legislative motions for wealth creation,wealth sharing, and increased opportunities for individual economic advance-ment. At the level of theory, the importance of individual preferences, choices,and values is crucial for an understanding of the effects of individual actions. Theextent to which it is, and can be, incorporated into wider socioeconomic planningprocesses is questionable though. It may be more economical for governments togeneralize when determining what is in the greater public interest, instead offocusing on the minutiae behind the rationale governing human behaviors. Thisperspective lends itself to the interpretation of author contributions on personalisteconomics. The foundational thinking for this branch of economic thought isnoble and unreservedly selfless, but unfortunately, it bears semblance to theunrealistic, as it has not traversed the boundary between theory and real-worldsocioeconomics. The suggested need for greater government involvement throughworkable public policy mechanisms and human capital investment is a positivestep that augurs well for increased social equity and greater social well-being.Whether governments are prepared to assume a more proactive role in this respect,however, is determined not just by social wants, but also by the workings ofglobalization. Social economics, as evidenced by the publications reviewed, hascome a long way, and will continue to add important elements to the wider debateon what is required to sustain social well-being in the long term.

Halcyon LouisThe Universalia Management Group Limited (Universalia)

Montreal, Quebec, Canadaq 2013 Halcyon Louis

http://dx.doi.org/10.1080/00346764.2012.761762

Measuring America: How Economic Growth Came to Define AmericanGreatness in the Late-Twentieth Century. By Andrew L. Yarrow (ed.)University of Massachusetts Press, 2010, Amherst, MA, 272 pp., $26.95(paper), ISBN 978-1-55849-835-8

Measuring America joins a recent bandwagon of books and articles critiquing theuse of GDP as a measure of social welfare but is unique in coming from anhistorian. It is readable and well researched, with appeal for economists and manyother social scientists as well as students of public policy, or cultural and socialhistory.

Yarrow makes the case that although emigration to America was largely basedon economic opportunity (the Pilgrims and other groups notwithstanding), therewas a fundamental shift in the 1950s toward defining “American exceptionalism”

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